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2008(4) Supreme 528
SUPREME COURT OF INDIA
S.B. Sinha and V.S. Sirpurkar, JJ.
United India Insurance Co. Ltd. — Appellant
versus
Ajay Sinha and another — Respondents
Civil Appeal No.______ of 2008
(Arising out of SLP (C) No. 17758 of 2006)
Decided on : 13-05-2008
(b) Arbitration and Conciliation Act, 1996 – Section 73 – The ‘Conciliator’, apart from assisting the parties to arrive at a settlement, is also permitted to make “proposals for a settlement” and “formulate the terms of a possible settlement” or “reformulate the terms” – In conciliation proceeding nobody is forced to take part therein – It has to be voluntary in nature – Where the parties have taken extreme positions, the same prima facie may not be the subject matter of conciliation which provides for a non binding settlement. (Paras 21, 25 and 28)
(c) Words and Phrases – Decide – The term ‘decide’ means to determine; to form a definite opinion; to render judgment. (Para 23)
(d) Legal Services Authorities Act, 1987 – Chapter VI-A – When an authority is created under a statute to bring about a settlement through Alternate Dispute Resolution mechanism, it does not mean that adjudicatory powers have also been conferred on it – Such provisions require close and strict scrutiny – However the Permanent Lok Adalat has an adjudicatory role to play. (Paras 24 and 26)
(2008) 3 SCC 1 – Relied upon.
(e) Legal Services Authorities Act, 1987 – Section 22-B – Where the very offence is disputed before a criminal court, and in case the court decides that the offence has taken place, the term ‘relating to an offence’ should be given wider meaning. (Para 29)
(f) Interpretation of Statutes – Provisions excluding jurisdiction of civil courts and conferring jurisdiction on authorities and tribunals other than civil courts have to be strictly construed – The Permanent Lok Adalat cannot arrogate to itself the appellate powers of High Court – It cannot allow or dismiss an appeal and issue directions to the parties. (Paras 33 and 35)
AIR 1969 SC 78; (2003) 6 SCC 220; 2007 (5) SCALE 357; AIR 1964 SC 444; AIR 1964 SC 1268; AIR 1958 SC 507; AIR 1963 SC 217; AIR 2005 SC 2392; JT 2008 (2) SC 83 – Relied upon.
(g) Legal Services Authorities Act, 1987 – Section 22-C – With respect to public utility services, “most of the petty cases which ought not to go in the regular Courts would be settled in the pre-litigation stage itself” – Instantly as the determination will involve the question as to whether or not an offence, which is non-compoundable in nature, has indeed been committed, this case falls outside the jurisdiction of the Permanent Lok Adalat. (Paras 38 and 39)
Facts of the case :
1. First respondent entered into a contract of insurance with the appellant company. Allegedly, a burglary took place in his godown in the night of 18th /19th August, 2002.
2. He submitted a claim with the appellant, besides filing an FIR, alleging that in the said burglary, goods worth Rs.11,14,597/- had been stolen away.
3. Appellant denied, disputed and refuted the said claim.
4. Respondent therefore filed an application before the District Consumer Forum claiming a sum of Rs.18,45,697.50 from the appellant. It was not entertained on the premise that deficiency in service had occurred in connection with a commercial contract.
5. Respondent, thereafter, filed an application for the Permanent Lok Adalat claiming a sum of Rs.9,80,000/-.
6. Appellant’s objection regarding jurisdiction of the Adalat was overruled stating that it had the pecuniary jurisdiction over the matter and only because a criminal case is pending in the Court of Chief Judicial Magistrate, Ranchi, the same was not relevant.
7. The High Court upheld the view.
Findings of the Court :
The case falls outside jurisdiction of the Permanent Lok Adalat. The impugned judgment cannot be sustained.
Result : Appeal allowed.
JUDGMENT
S.B. Sinha, J. —
Leave granted.
1. Legal Services Authorities Act, 1987 (the Act) was enacted to constitute Legal Services Authorities to provide for free and competent legal service to the weaker sections of the society, to ensure that opportunities for securing justice are not denied to any citizen by reason of economic or other disabilities, and to organize Lok Adalats to secure that the operation of the legal system promotes justice on a basis of equal opportunity.
2. The Act was enacted with a view to give effect to the provisions of Article 39A of the Constitution of India which mandates that State shall secure that the operation of the legal system promotes justice on a basis of equal opportunity, and shall in particular, provide free legal aid, by suitable legislation or schemes or in any other way, to ensure that opportunities for securing justice are not denied to any citizen by reason of economic or other disability.
3. If we are to look at the history of grant of legal aid, it may be noticed that the Law Commission of India in its 14th report on ‘reform of Judicial Administration’ published in 1958, strongly advocated the need for rendering legal aid to poor litigants and categorically stated that’ the rendering of legal aid to the poor litigants is not a minor problem of procedural law but a question of fundamental character’.
4. The committee under the Chairmanship of Hon’ble Mr Justice V.R. Krishna Iyer, then a Member of the Law Commission, constituted by the Government of India Order dated 27th October, 1972 to consider the question of making available to the weaker sections of the community and persons of limited means in general and citizens belonging to the socially and educationally backward class in particular, facilities for :
(a) legal advice so as to make them aware of their constitutional and legal rights and obligations; and
(b) legal aid in proceedings before Civil, Criminal and Revenue Courts so as to make justice more easily available to all sections of the community.
With a view to implement the report of the Bhagwati Committee and in fulfillment of its constitutional obligations under Article 39-A of the Constitution, a committee known as the “Committee for Implementing Legal Aid Schemes (CILAS) was being constituted by the Government of India at the very beginning under the Chairmanship of Hon’ble Mr. Justice P.N. Bhagwati. This Committee formulated a broad pattern of the legal aid programme to be set up in the country. It gave stress on preventive legal aid programme with a view to creating legal awareness amongst the people. It also suggested dynamic and activist rogrammes to carry legal services to the doorsteps of the rural population, to promote community mobilization and rights enforcement through public interest litigations and other statutes. The Committee also framed a model scheme for establishment of State Legal Aid and Advice Boards, as also, Committees at the High Court, District and Tahasil levels to cater legal services to the people at large.
5. In the year 1987 the Legal Services Authorities Act was enacted by the parliament with a view to provide free and competent legal services and to ensure opportunity for securing justice to the downtrodden class of the society. The Statement of Objects and Reasons for enacting the Amendment Act is as under :-
“The Legal Services Authorities Act, 1987 was enacted to constitute legal services authorities for providing free and competent legal services to the weaker sections of the society to ensure that opportunities for securing justice were not denied to any citizen by reason of economic or other disabilities and to organize Lok Adalats to ensure that the operation of the legal system promoted justice on a basis of equal opportunity. The system of Lok Adalat, which is an innovative mechanism for alternate dispute resolution, has proved effective for resolving disputes in a spirit of conciliation outside the courts.”
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